S.Korea to issue $93b govt bonds in 2015

SEOUL - South Korea's finance ministry said Tuesday that it plans to issue 102.7 trillion won ($93 billion) worth of government bonds next year to finance its expansionary fiscal package.

The figure was up 5.3 percent compared with this year, according to the finance ministry. To enhance predictability of the debt issuance, the ministry plans to float about 8-9 trillion won in government bonds every month.

Bonds with a maturity of three and five years would account for 20-30 percent of the total for next year, with the Treasury that matures in 10 years taking up 25-35 percent. Debts that mature in 20 and 30 years would make up 5-15 percent next year.

The plan to increase bond issuance came as the government would maintain an expansionary fiscal policy in a bid to stimulate the sluggish economy.

The ministry revised down its 2015 growth outlook from 4 percent to 3.8 percent citing sour consumer sentiment and economic uncertainties. The US Federal Reserve is widely expected to hike rates in 2015.

A ministry official said that the 2015 Treasury sales would be absorbed without a hitch despite uncertainties over the Fed's expected interest rate hike, noting that demand from insurers and pensions continue increasing for the government bonds.